AI May Determine the Price of Your Next Delta Ticket

Struggling to snag the cheap Delta ticket everyone else on your trip got? AI might be to blame.

Delta Air Lines (DAL) uses an AI pricing tool on 3% of domestic flights and aims to apply it to 20% by the end of the year, President Glen Hauenstein said on an earnings conference call Thursday. Delta is incrementally deploying technology designed to identify the maximum a traveler will pay because “the more cases we give it, the more it learns,” Hauenstein said.

Though technically in a “heavy testing” phase, the AI tool—from the Israeli company Fetcherr—figures into Delta’s plans. Fetcherr functions like a constantly-on “super analyst” and is ushering in “a full reengineering of how we price,” Hauenstein said at the company’s Investor Day in November.

“The initial results show amazingly favorable unit revenues,” Hauenstein said in November, according to a transcript made available by AlphaSense. (Fletcherr said at a 2022 conference that its product had been shown to boost revenue 9%, as reported by travel site One Mile at a Time.)

Delta wants Fetcherr to set prices and how many seats are available at those prices—eventually creating what Hauenstein called an “offer management” system.

“We will have a price that’s available on that flight, on that time to you, the individual–not a machine that’s doing an accept-reject, and a static price grid,” Hauenstein said in November. 

After soaring on better-than-expected results Thursday, Delta shares were recently off by about 2% and have fallen 8% so far this year.